SAN FRANCISCO (KCBS) — Cole Hardware has entered guilty pleas to felony grand theft and fraud in connection with a embezzlement scheme at the San Francisco Public Utilities Commission.

The local chain will also pay restitution of $51,500 after a whistleblower tipped off the PUC back in 2007 that something fishy was going on at the PUC work site on Treasure Island.

The tipster said workers were stealing by falsifying invoices from Cole Hardware with the help of a store employee.

KCBS’ Barbara Taylor Reports:

SF’s Cole Hardware Pleads Guilty In Connection to Embezzlement Scheme

PUC General Manager Ed Harrington said the workers were fired and two have lost their pensions.

“It’s not right. It is not the way we do business and we want to make sure that when we catch any wrong doing like this, we take the sternest actions possible,” Harrington said.

District Attorney George Gascon said six defendants have pled guilty, followed by Cole Hardware’s admission of guilt.

“We’re hoping this will send a very clear message to those that are conducting business with the city that if they violate the rules and the law they will be aggressively prosecuted,” Gascon said.

According to the complaint, the hardware store padded invoices to conceal purchases for things like wood for a deck and beef for a barbeque that the ringleader, Donnie Thomas, used in his own home.

Cole Hardware, the corporate entity entered the guilty plea, not the owners nor any employees.

Cole Hardware issued a statement late this afternoon saying that two employees who worked there for more than 20 years submitted the misleading invoices. The owners said they weren’t aware of their employees actions and fired them after learning what had happened. The company said it accepted the plea deal after an expensive legal fight.

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